Who benefits from World Bank projects?

Anonymous. 16 February, 1995

When defending its record on evictions, the World Bank frequently
argues that it must provide services, such as drinking water and energy,
to the poor and that this inevitably disrupts communities. It is
undeniable that many people lack basic services, but it does not follow
that the World Bank can supply them: Bank projects are built in the
name of the poor, but in fact mainly benefit industry and politically-
powerful sections of society.

WATER FOR THE POOR?

The Sardar Sarovar dam and water delivery project (SSP) in India is a
good example. It is supposed to bring drinking and irrigation water to
the "parched throats" in Gujarat's Kutch and Saurashtra regions.

Beneath the rhetoric, the detailed plans for SSP reveal that the project
can only irrigate 1.6% of Kutch and 9.3% of Saurashtra's cultivable areas.
In spite of this, the project is being allotted four-fifths of Gujarat's water
budget. The Economic Times commented: "with the mounting cost of
SSP . . . schemes in the water-starved areas of North Gujarat and
Saurashtra have either been scrapped altogether or are being ignored."

The World Bank claims that SSP will "support irrigated agricultural
production sufficient to feed about 20 million people." This overlooks
the political reality that much of the water will be used for water-intensive
sugar cane for export. Seven large sugar factories are being
built nearby; one has been linked to the Chief Minister of Gujarat. The
World Bank also overlooks the finding of its own Irrigation Sector
Review which found that: "Irrigation efficiency in India has often been
assumed to be 60% . . . [yet] most irrigation commands in India probably
have an irrigation efficiency of 20 to 35%." The World Bank's
Independent Review of SSP found that "there is good reason to believe
that the Projects will not work as planned."

Kalpraviksh, a Delhi-based NGO, found in a 1993 report that SSP's
drinking water and power potential were also hugely exaggerated, while
most of any water and power which does emerge will go to urban areas,
not the poor. The report comments that "the provision of drinking water
is one of the main moral and political justifications for the SSP in Gujarat
where acute water scarcity has been a crippling problem." Yet it reveals
that no detailed plan or budget for drinking water supply exists and that
"the number of beneficiary villages, urban areas and their population
has been changing at almost every mention." For Kutch and Saurashtra:

"The project authorities have simply listed as a target the total number
of villages . . . ignoring or simply unaware of the fact that 61 villages in
Kutch and 149 villages in Saurashtra are listed as uninhabited."

Meanwhile the project displays a strong urban bias: "In an area where
the population is approximately 70% rural, cities were supposed to
receive over 80% of the total quantity of drinking water." The cost of
supplying drinking water has still not been included in the cost-benefit
analysis of SSP. Despite such criticisms, the World Bank continues to
insist that SSP will "meet the domestic [water] needs of some 30 million
people."

HELPING ELITES

The World Bank's effectiveness in reaching poor people is also
questioned in a report commissioned under the Bank's resettlement
review. The report, by a Philippines NGO [see box, p.9], comments:

"The Bank needs fresh and creative lending approaches . . . . Unless the
Bank provides access to resources directly to the communities and
supports NGOs assisting them in their initiatives in shelter, resettlement,
and other social concerns these sectors will always be at the bottom of
resource allocation. Presently only 20% of the shelter fund [goes to
people on] low income which is P5,000 and below, 80% [goes] to the
middle class."

The World Bank is not equipped to support community initiatives, so its
projects have rarely helped the poor in whose name they are built.
Instead they benefit an elite minority and take money away from
projects which could bring real benefits to the poor.

The World Bank not only redistributes wealth upwards within countries,
but also between countries. The British ODA admits that British banks
and businesses make more money from the World Bank than Britain
pays in.

The World Bank's claim that its displacement is necessary and
unavoidable in order to help "development" for the world's poorest
people, is thus dangerously misleading. The World Bank's record does
not inspire confidence that it can be trusted to alleviate poverty in the
future.